Gayatri Projects Ltd Management Discussions

INDIAN ECONOMY

India surpassed Japan in June 2025 to become the fourth largest economy in the world. Indias GDP at Constant Prices stood at C 47.89 lakh crore in Q1 of FY26, up from C 44.42 lakh crore in Q1 FY25, registering a growth rate of 7.8%. Nominal GDP or GDP at Current Prices for the same period was estimated at C 86.05 lakh crore, compared to C 79.08 lakh crore in the corresponding quarter of the previous year, showing a growth rate of 8.8%. Indias growth reflects a combination of strong domestic demand and policy reforms positioning the country as a key destination for global capital.

Over the years, the Indian government has introduced many initiatives to strengthen the nations economy. The Indian government has been effective in developing policies and programmes that are not only beneficial for citizens to improve their financial stability but also for the overall growth of the economy. Over recent decades, Indias rapid economic growth has led to a substantial increase in its demand for exports. Besides this, a number of the governments flagship programmes, including Make-in-India, Start-up India, Digital India, the Smart City Mission, and the Atal Mission for Rejuvenation and Urban Transformation, is aimed at creating immense opportunities in India.

Growth was strong in the first quarter of 2025 and continued to improve in the subsequent two quarters. The interest rates were cut by the RBI which loosened liquidity conditions. It achieved a fiscal deficit of 4.8% of GDP, against the budgeted 4.9%. India received credit rating upgrades from three credit rating agencies in 2025, starting with Morningstar DBRS in May, followed by S&P in August and R&I in September. S&Ps upgrade of India from BBB- to BBB was Indias first credit rating upgrade from a major agency in nearly two decades.

Indian Infrastructure industry

The Indian infrastructure market has expanded and is poised for robust growth. It has been valued at $204.06 million in 2025 exhibiting a Compound Annual Growth Rate (CAGR) of 9.57% from 2025 to 2033. Government initiatives focused on enhancing social infrastructure, substantial investments in transportation infrastructure, and the increased need for improved utilities

infrastructure are primary catalysts and few of the key drivers for the expansion.

The Indian infrastructure industry is experiencing significant transformation driven by several key factors. Government initiatives like the National Infrastructure Pipeline (NIP) aim to invest billions of USD in infrastructure development across various sectors, which surges demand for construction materials, equipment, and skilled labour. The demand for improved infrastructure in both urban and rural areas is being driven by the growing urbanization and increase in incomes.

Opportunities for private sector participation through Public-Private Partnerships (PPPs) are on the rise due to focus on smart city initiatives and the development of industrial corridors. Although there are challenges including delays in land acquisition, regulatory hurdles and financial constraints, efficiency and productivity are increasing due to technological advancements which include adoption of sustainable construction materials and digitalization.

The industrys growth trajectory is expected to remain strong, driven by sustained government spending and the growing need to modernize existing infrastructure. Looking ahead to 2033, the sector is expected to see an increased focus on sustainability, in line with global environmental initiatives.

YOUR COMPANY

Gayatri Projects Ltd (GPL), founded in 1963, is one of the oldest & most experienced pure-play EPC companies within the Indian Infrastructure space. It has over five decades of experience in execution of major civil works and is diversified across geographies & infrastructure segments. The company has pan India operations within several infrastructure verticals like roads, irrigation works, water distribution works, mining works & industrial construction projects. Gayatri Projects works largely with State Government entities, NHAI, MORTH and other companies & mostly executing the EPC projects.

Due to changes in business conditions on account of the Covid-19 pandemic, there has been a delay in recovery of Trade Receivables, increase in materials

cost and increase in cost of services, non-availability of adequate working capital to execute the contract works on hand, non-awarding of fresh contract works due to lenders reluctance to provide bank guarantee or other facilities, etc., have severely affected the business operations and billing cycle of the company. This has triggered that the Company defaulted in repayment of dues to its lenders and devolvement of significant Non-Fund based facilities. As detailed in the Boards Report, the Company is now out of CIRP, completed OTS payment and working towards business growth.

OPERATIONAL & FINANCIAL REVIEW

Your Company has achieved revenue of C 449.92 crores in F.Y. 2024-25 as against C 679.55 crores in the previous year on a standalone basis. The revenue from operations has declined in F.Y. 2024-25 when compared to the last year.

Your Company has incurred losses of C 68.80 crores for the current financial year as against losses of C 53.02 crores in the previous year. The main reasons for incurring the losses are on account of increase in materials cost, increase in cost of overheads, nonavailability of adequate working capital to execute the works on hand, non-awarding of fresh contract works due to lenders reluctance to provide bank guarantee etc., which have severely affected the business operations of the company. As a result, the Company has defaulted in repayment of dues to its lenders and devolvement of significant Non-Fund based facilities has happed and most of the lenders have recalled their financial facilities extended to the company.

SEGMENT WISE PERFORMANCE:

As per Accounting Standard AS- 17, the business of the Company falls under only one segment of business; hence segment report is not applied.

FUTURE PLANS

The Company is quite optimistic about substantial improvement in the order book so as to revive the Companys growth. The company is focusing on the execution and completion of the current order book to improve the cash flows to overcome the present financial crisis and to meet the expenses. As the OTS payment is completed, the company is now debt- free save for bank guarantees and is eligible to bid for large-scale bulk orders. Approval of shareholders of the company was obtained for preferential issue of shares to raise the equity to settle the lenders dues and infuse the working capital to complete ongoing works.

RISKS & CONCERNS

Construction Industry faces risks such as increase in construction cost risk, delays in completion risks, quality and standard of the work risks. Further, Construction sector also faces operating risks which include increase in raw material cost risks, labour availability risks, changes in political and regulatory risks and capital cost risks etc. Most of the above risks are manageable and risks can be mitigated by close monitoring of the projects and better contract management.

Significant Changes in Key Financial Ratios

The following are significant changes in key financial ratios of F.Y. 2024-25 as compared to previous year F.Y. 2023-24 and reasons for such changes:

S. No	Ratio	FY 2024-25	FY 2023-24	% of Change
1	Current Ratio	0.50	0.51	-1.78
2	Debt-Equity Ratio	-2.72	-2.90	-6.09
3	Debt Service Coverage Ratio	0.00	0.00	274.69
4	Return on Equity Ratio	0.05	0.04	23.27
5	Net profit ratio	-15.29	-7.80	95.98
6	Return on Capital employed	-0.01	-0.02	-162.16

Explanation for Significant Changes : Substantial variance noted above in the Ratios is due to corporate insolvency as the Net worth of the Company is eroded substantially and the Company has overdue to the financial creditors as well as operational creditors.

HUMAN RESOURCES

The companys processes and systems are designed to empower employees and enable innovation within the workplace. Gayatri Projects is committed to providing an environment that encourages employees to perform to full potential and allows them to grow professionally as well as personally. The company continuously invests in the development of its human resources through measures aimed at talent acquisition, development, motivation and retention. As a supportive gesture, the company has also taken personal accident insurance for all its employees. As on March 31, 2025, the Company has 454 employees.

INTERNAL CONTROL AND RISK MANAGEMENT SYSTEMS

The company has a well-defined and elaborate Risk Management procedure, which is based on three pillars: Business Risk Assessment, Operational Controls Assessment and Policy Compliance processes. The Risk Management Committee monitors the key risks in the various business segments and evaluates strategies to mitigate these. It also reviews each tender carefully for any potential risks before the bidding process begins. The Companys internal control systems are commensurate with the nature of its business. They are tested periodically and certified by Statutory as well as Internal Auditors. The Audit Committee reviews the adequacy and effectiveness of our internal control environment and monitors the implementation of audit recommendations. The company has a qualified and independent audit committee, where majority of directors are independent.

CAUTIONARY STATEMENT

Statements in this management discussion analysis describing the Companys objectives, projections, estimates, expectations may be forward looking within the meaning of applicable securities-laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could make difference to Companys operations include economic conditions affecting the markets in which the Company operates, changes in the Government regulations, tax laws and other statutes and other incidental factors.

secretarial audit report

FOR THE FINANCIAL YEAR ENDED 31 st MARCH, 2025

[Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

The Listed entity was admitted into Corporate Insolvency Resolution Process (CIRP) by the Honble National Company Law Tribunal (NCLT), Hyderabad, dated 15.11.2022 under the Provisions of Insolvency & Bankruptcy Code, 2016 (Code). The Powers of the Board of Directors of the Company were suspended from the date of the order as per Section 17 of the Code and vested with Mr. Sai Ramesh Kanuparthi, Resolution Professional.

This report is to be read in the light of the fact that the company was under CIRP during the period under review.

The accuracy and completeness of the information contained in this certificate may be liable to correction or modification in the light of any new information that may come to light at a later date.

We have tried to obtain information from the company to provide the information required for the purpose of issuing this certificate for the period from 1 st April 2024 to 31 st March, 2025. However, based on our understanding and after reviewing the available information, we hereby certify that:

We have conducted the secretarial audit on the compliance of applicable statutory provisions and the adherence to good corporate practices by GAYATRI PROJECTS LIMITED [CIN: L99999TG1989PLC057289] (hereinafter called the Company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on our verification of Companys books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, We hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on 31 st March, 2025 complied

with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31 st March, 2025 according to the provisions of:

(i) The Companies Act, 2013 (the Act) and the rules made there under;

(ii) The Securities Contracts (Regulation) Act, 1956 (SCRA) and the rules made there under;

(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;

(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made there under to the extent of Foreign Direct Investment, Overseas Direct Investment;

(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (SEBI Act):-

a. The Securities and Exchange Board of

India (Substantial Acquisition of Shares and Takeovers) Regulations, 2018;

b. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

c. The Securities and Exchange Board of

India (Issue of Capital and Disclosure Requirements) Regulations, 2018; (Not applicable during the period under review);

d. The Securities Exchange Board of India (Share Based Employee Benefits) Regulations, 2014; (Not applicable during the period under review);

e. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 ; (Not applicable during the period under review);

f. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;

g. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; (Not applicable during the period under review); and

h. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018; (Not applicable during the period under review ) ;

i. The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015;

(vi) The Management has identified and confirmed

the following Laws as being specifically applicable

to the Company:

1. Insolvency and Bankruptcy Code, 2016

2. Employees State Insurance Act, 1948

3. Employees Compensation Act, 1923

4. Employees Provident Fund and Miscellaneous Provisions Act, 1952

5. Indian Contract Act, 1872

6. Income Tax Act, 1961 and Indirect Tax Laws

7. Indian Stamp Act, 1999

8. Minimum Wages Act,1948

9. Payment of Bonus Act, 1965

10. Payment of Gratuity Act, 1972

11. Payment of Wages Act, 1936.

We believe that the audit evidence which we have obtained is sufficient and appropriate to provide a basis for our audit opinion. In our opinion and to the best of our information and according to explanations given to us, we believe that the systems and mechanisms established by the Company are adequate to ensure compliance of laws as mentioned above. We have not examined compliance by the Company with applicable financial laws, like direct and indirect tax laws, since the

same have been subject to review by statutory auditor, tax auditor, and other designated professionals.

We have also examined compliance with the applicable clauses / regulations of the following:

(i) Secretarial Standards with respect to Meetings of Board of Directors (SS-1) and General Meetings (SS-2) issued by The Institute of Company Secretaries of India;

(ii) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above except the following:

1) The Company has not complied with the provisions in relation to submission of financial results under SEBI Listing Regulations, 2015;

2) The Company has partially complied with provisions of the Companies Act, 2013;

3) The Company has partially complied with regulations of SEBI Listing Reulations,2015;

4) The Company has partially complied with regulations of SEBI (PIT) Regulations, 2015;

5) The Company has partially complied with applicable Secretarial Standards;

6) The Company is non-compliant of Structure Digital Data Base (SDD) as required under regulation 3(5) & 3(6) of SEBI (PIT) Prohibition of Insider trading Regulations, 2015;

7) Annual General Meeting for F.Y. 2023-24 was not conducted, Chief Financial Officer and Company Secretary & compliance officer were not appointed;

8) An unpaid dividend amount pertaining to F.Y. 201516 due for transfer to IEPF Account on November 04, 2023 is yet to be transferred;

9) Other observations are given in Annexure A to this report.

10) The Listed Entity has taken the following actions to comply with the observations made in previous reports: The Company is in the process of making an application to the Exchanges for waiver of the fines levied, which occurred during CIRP.

We further report that

Pursuant to sub-regulations (2A) & (2B) of Regulation 15 of the SEBI (LODR) Regulations, 2015, the Company is not required to conduct the Board & Committee meetings with effect from 15.11.2022 as the Company was admitted under CIRP. Hence, audit/certification related to composition of Board, adequate notice, Notes on Agenda, recording minutes, compliance mechanism etc. are not applicable.

Special note:

As stated above, the Company was under CIRP w.e.f. 15/11/2022 and the Honble NCLT, Hyderabad Bench, approved the application filed u/s 12A of the Insolvency & Bankruptcy Code (IBC) for withdrawal of the Company Petition filed under Section 7 of IBC, vide their order dated 10/09/2025, and accordingly, the Corporate Insolvency Resolution Process initiated against the

Company was withdrawn. The Resolution Professional was discharged.

for M/s. N. Madhavi & Associates

Company Secretaries

N. Madhavi

Proprietor M.No. A16866, CP.No:11732 UDIN: A016866G002974964 Peer Review Cert. No: 5479/2024

Place: Hyderabad Date: 29 th December, 2025

This report is to be read with my letter of even date which is annexed as Annexure and forms an integral part of this report.

annexure to the secretarial audit report

To,

The Members,

GAYATRI PROJECTS LIMITED

B-1, T.S.R. Towers, 6-3-1090,

Raj Bhavan Road, Somajiguda,

Hyderabad - 500082, Telangana

Our report of even date is to be read along with this letter.

1. Maintenance of secretarial records is the responsibility of the management of the company. Our responsibility is to express an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the company.

4. Where ever required, we have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc.

5. It is the responsibility of the management of the company to devise proper systems to ensure compliance with the provisions of Corporate and other applicable laws, rules, regulations, standards and to ensure that the systems are adequate and operate effectively. Our examination was limited to the verification of procedure on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the company nor of the efficacy or effectiveness with which the management has conducted the affairs of the company.

for M/s. N. Madhavi & Associates

Company Secretaries

	N. Madhavi
	Proprietor
	M.No. A16866, CP.No:11732
	UDIN: A016866G002974964
	Peer Review Cert. No: 5479/2024
Place: Hyderabad
Date: 29 th December, 2025